Swiss bank UBS’s attempt to foreclose on a mortgage loan on a London property of Vijay Mallya’s scored a victory as the judge in the case approved their application to strike out certain parts of an amended defence submitted in May by the businessman’s legal team, on almost all counts.
The case at the business and property courts of the Royal Court of Justice has been ongoing as the bank has sought to take possession of the property in prime central London, over the £20.4 million interest. The bank says that Rose Capital, through which the house was originally purchased in 2005, had not repaid the loan, that was stated to be for a period of five years and subject to early termination by the claimant.
Mr. Mallya’s legal team have sought to fight the application from UBS on a number of grounds, including a failure to recognise occupation rights and an allegation that UBS had “delayed and frustrated” the defendants’ attempts to refinance the loan.
In his ruling the judge said that striking out a claim was a step that the court would “not take lightly,” and only took place if a claim was “bound to fail.” He said that aside from one issue – the defendants claim that UBS had pledged to roll over the debt for another five years after the initial five-year period – the case based on 10 other issues was “bound to fail” and it was appropriate for them to be struck out of the amended defence. The one remaining issue could remain within the amended defence document ahead of a trial that is set to commence next year.
“The language of the contractual terms in this case could not be more stark. The loan was made on an uncommitted basis and repayable on demand. UBS’ standard conditions were amended to remove the need for there to be a trigger event before it was entitled to call in the loan and UBS was entitled to call in the loan in its absolute discretion,” wrote Chief Master Mash in his judgment.
Beyond the details of the case, the judgment also offers an insight into upheavals within Mr. Mallya’s defence team, including the breakdown between the law firm – Blake Morgan — and Mr. Mallya “including in relation to fees from late July 2018 onwards.” The judgment was critical of the defences’ handling of a two-day hearing that was set to take place after the judge made “special arrangements” to accommodate the defence’s specific concerns and requirements.
The defence had sought to postpone proceedings, pointing to this breakdown – circumstances that failed to impress the judge. “Time has been allocated in the court diary which could have been devoted to other cases and an adjournment risks disruption to the progress of the claim, prejudice to the other party and wasted costs,” he wrote, also noting that relations had begun to break down well before the hearing at which the date of the two-day hearing was set.
“UBS is pleased with the decision. Given that proceedings are ongoing it would be inappropriate to comment further,” said the bank.
